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Health care in the United States
Health care in the United States is provided by many separate legal entities.
The U.S. spends more on health care, both as a proportion of gross domestic
product (GDP) and on a per-capita basis, than any other nation in the world.
Current estimates put U.S. healthcare spending at approximately 15% of GDP, the
world's highest. The health share of GDP is expected to continue its historical
upward trend, reaching 19.6 percent of GDP by 2016.
In the United States, around 84% of citizens have health insurance, either
through their employer (60%), purchased individually (9%), or provided by
government programs (27%; there is some overlap in these figures). The federal
government does not guarantee universal health care to all its citizens, but
certain publicly-funded health care programs help to provide for the elderly,
disabled, children, and the poor, and federal law ensures public access to
emergency services regardless of ability to pay. In 2001, only the governments
of Iceland and Norway spent more per capita on health care. U.S. government
programs accounted for over 44% of health care expenditures, making the U.S.
government the largest insurer in the nation. When public and private spending
are added together, the U.S. spends more per capita than any other nation.
Americans without health insurance coverage, currently about 16% of the
population, or 46 million people, are expected to pay privately for medical
services. Health insurance is expensive, and medical bills are overwhelmingly
the most common reason for personal bankruptcy in the United States.
The debate about U.S. health care concerns questions of access, efficiency, and
quality purchased by the high sums spent. The overall performance of the United
States health care system was ranked 37th by the World Health Organization (WHO)
in 2000, but the same report assessed Americans' overall health at 72nd among
191 member nations included in the study. However, most Americans rate their own
health as "excellent" or "very good". The National Health Interview Survey,
released annually by the Centers for Disease Control's National Center for
Health Statistics reported that approximately 66% of survey respondents said
they were in "excellent" or "very good" health in 2006. This percentage has been
declining since 1998.
Health care providers
American health care is provided by a diverse array of individuals and legal
entities. Individuals offer inpatient and outpatient services for commercial,
charitable, or governmental entities. The healthcare system is not
fully-publicly funded but is a mix of public and private funding. In 2004,
private insurance paid for 36% of personal health expenditures, private
out-of-pocket payments were 15%, while federal, state, and local governments
paid 44%.
Services
"Ambulatory care" refers to health care outside the hospital; most health care
in the United States occurs in the outpatient setting. "Home health care
services" are generally nursing enterprises, but are usually ordered by
physicians. Private sector outpatient medical care is provided by personal
primary care physicians (specialists in internal medicine, family medicine, and
pediatric medicine), subspecialty physicians (gastroenterologists,
cardiologists, or pediatric endocrinologists are examples) or non-physicians
(including nurse practitioners and physician assistants). In 1996, concierge
medicine emerged, where enhanced care and services are provided by primary care
physicians for a retainer fee.
Facilities
There are for-profit hospitals, which are usually operated by large private
corporations and there are nonprofit hospitals, which may be operated by county
governments, state governments, religious orders, or independent nonprofit
organizations. Hospitals provide some outpatient care in their emergency rooms
and specialty clinics, but primarily they exist to provide inpatient care.
Hospital emergency departments and urgent care centers are sources of sporadic
problem-focused care. "Surgicenters" are examples of specialty clinics. Hospice
services for the terminally ill who are expected to live six months or less are
most commonly subsidized by charities and government. Prenatal, family planning,
and "dysplasia" clinics are government-funded obstetric and gynecologic
specialty clinics respectively, and are usually staffed by nurse practitioners.
Medical products, research and development
Companies provide medical products such as pharmaceuticals and medical devices.
The nation spends a substantial amount on medical research, mostly
privately-funded. As of 2000, non-profit private organizations (such as the
Howard Hughes Medical Institute) funded 7%, private industry funded 57%, and the
tax-funded National Institutes of Health funded 36% of medical research in the
U.S. However, by 2003, the NIH funded only 28% of medical research funding;
funding by private industry increased 102% from 1994 to 2003. The research and
development for applications is primarily done in commercial research and
development labs while the government and universities fund the majority of
basic research. Much of this basic research is funded or performed by
governmental research institutes such as the NIH and NIMH.
Health care payment
Most Americans, 59.5%, receive their health insurance coverage through an
employer, and about 9% purchase it directly from the market. Government sources
cover 27.3% of the population (80.2 million). In 2005, there were 46.6 million
people in the U.S. (15.9% of the population) who were without health insurance
for at least part of that year.(ibid) Among the uninsured, nearly 37 million
were employment-age adults (ages 18 to 64), and more than 26 million worked at
least part time. About a third of the uninsured live in households with an
income over $50,000. It has been estimated that nearly one fifth of the
uninsured population is able to afford insurance, almost one quarter is eligible
for public coverage, and that the remaining 56% need financial assistance (8.9%
of all Americans).
Commercial
The "fee-for-service" business model is the default legal situation where the
patient must pay out-of-pocket in full for all services rendered, similar to
other service industries. .
Insurance payments are a form of cost-sharing and risk management where each
individual or their employer pays predictable monthly premiums. This
cost-spreading mechanism often picks up much of the cost of health care, but
individuals must often pay up-front a minimum part of the total cost (a
‘’deductible’’), or a small part of the cost of every single procedure (a
copayment).
Managed care includes preferred provider organizations, in which insurers
negotiate discounted rates with contracted providers, health maintenance
organizations such as Kaiser Permanente, which run their own hospital and clinic
networks to control costs, and a few employers who employ an in-house physician
(e.g., Google) or even operate their own outpatient clinics. Managed care is
controversial, because cost control requires that treatments be authorized by a
third party, intervening between doctors and their patients. Managed care
occasionally denies treatment options considered too costly for their benefits.
Managed care is a form of "rationing," considered one of the drawbacks of
nationalized health care.
Public
Many individuals not covered by private insurance are covered by government
insurance programs like Medicare and Medicaid, and various state and local
programs for the poor. In 2006, Medicaid provided health care coverage for 49.3
million poor Americans and Medicare provided health care coverage for 43.1
million elderly and disabled Americans. Enrollment in Medicare is expected to
reach 77 million by 2031, when the baby boom generation is fully enrolled. One
study estimates that about 25% of the country's uninsured, or roughly another 11
million people, are eligible for government health care programs but unenrolled.
However, extending coverage to all who are eligible remains a fiscal challenge.
It has been reported that the number of physicians accepting Medicaid has
decreased in recent years due to relatively high administrative costs and low
reimbursements. In 1997, the federal government also created the State
Children's Health Insurance Program (SCHIP), a joint-federal state program to
insure children in families who earn too much to qualify for Medicaid but cannot
afford health insurance. SCHIP covered 6.9 million children in 2006, but the
program is already facing funding shortfalls in many states.
Role of government in health care market
The cost impact of a mixed public-private system is subject to debate. Some
commentators and economists observe that government programs bid up health care
prices because they lack the financial incentives to bargain with health care
providers. On the other hand, low reimbursement rates for Medicare and Medicaid
have increased cost-shifting pressures on hospitals and doctors, who charge
higher rates for the same services to private payers, which eventually affects
health insurance rates. Furthermore, health maintenance organizations were
declining before Congress passed the Health Maintenance Organization Act of
1973, heavily subsidizing the HMO business model.
Health care regulation and oversight
There are government institutes such as the Centers for Disease Control and
Prevention that identify threats to public health. In addition there are
regulatory bodies such as the FDA that identify and approve drugs for medical
use and sale. Many healthcare organizations also voluntarily submit to
inspection and certification by the Joint Committee on Accreditation of Hospital
Organizations, JCAHO.
System inefficiencies and inequities
Inefficiencies
Increased use of catastrophic care
Uninsured Americans are less likely to have regular health care and use
preventive services. They are more likely to delay seeking needed care,
resulting in more medical crises and emergency hospitalizations, which are more
expensive than ongoing treatment for such conditions as diabetes and high blood
pressure. Uninsured patients are twice as likely to visit hospital emergency
rooms as those with insurance; burdening a system meant for true emergencies
with less-urgent care needs.
Shared costs of the uninsured
The costs of treating the uninsured must often be absorbed by providers as free
care, passed on to the insured via cost shifting and higher health insurance
premiums, or paid by taxpayers through higher taxes.
Administrative costs
The health care system in the U.S. has a vast number of players — there are
hundreds, if not thousands, of insurance companies in the U.S. This system has
considerable administrative overhead, far greater than in nationalized,
single-payer systems, such as Canada's. An oft-cited study by Harvard Medical
School and the Canadian Institute for Health Information determined that some 31
percent of U.S. health care dollars, or more than $1,000 per person per year,
went to health care administrative costs, nearly double the administrative
overhead in Canada, on a percentage basis.
Inequities
The coverage gap
Enrollment rules in private and governmental programs result in millions of
Americans going without health care coverage, including children. The most
recent data available from the U.S. Census Bureau indicates that 46.6 million
Americans (about 15.9% of the total population) had no health insurance coverage
during 2005. This constituted a rise of about 1.3 million from the previous
year. Most uninsured Americans are working-class persons between the ages of 2
and 65 whose employers do not provide health insurance, and who earn too much
money to qualify for one of the local or state insurance programs for the poor,
but do not earn enough to cover the cost of enrollment in a health insurance
plan designed for individuals. As health insurance rates rise and the population
ages, those seeking to purchase health insurance directly are finding it
increasingly difficult to do so, because some insurers are managing their risk
by denying directly purchased coverage to individuals who have pre-existing
conditions, some of them minor. Some states (like California) do offer limited
insurance coverage for working-class children, but not for adults; other states
do not offer such coverage at all, and so, both parent and child are caught in
the notorious coverage "gap." Although EMTALA certainly keeps alive many
working-class people who are badly injured, the 1986 law neither requires the
provision of preventive or rehabilitative care, nor subsidizes such care, and it
certainly does nothing about the difficulties in the American mental health
system.
Health disparities among minorities
Health disparities
In the United States, health disparities are well documented in minority
populations such as African Americans, Native Americans, Asian Americans, and
Hispanics. When compared to whites, these minority groups have higher incidence
of chronic diseases, higher mortality, and poorer health outcomes. Among the
disease-specific examples of racial and ethnic disparities in the United States
is the cancer incidence rate among African Americans, which is 25% higher than
among whites. In addition, adult blacks and Hispanics have approximately twice
the risk as whites of developing diabetes. Minorities also have higher rates of
cardiovascular disease, HIV/AIDS, and infant mortality than whites.
Regulatory inefficiencies and inequities
Healthcare regulatory costs
The healthcare industry is likely the most heavily regulated industry in the
United States. A Cato Institute study suggests that this regulation provides
benefits in the amount of $170 billion but costs the public up to $340 billion.
The study found that the majority of the cost differential arises from medical
malpractice, FDA regulations, and facilities regulations. Part of the cost
arises from regulatory requirements that prevent technicians without medical
degrees from performing treatment and diagnostic procedures that carry little
risk.
Mental illness and the Emergency Medical Treatment and Active Labor Act (EMTALA)
Mentally ill patients present a challenge for emergency departments and
hospitals. In accordance with the Emergency Medical Treatment and Active Labor
Act, mentally ill patients who enter emergency rooms are evaluated for emergency
medical conditions. Once mentally ill patients are medically stable, regional
mental health agencies are contacted to evaluate them. Patients are evaluated as
to whether they are a danger to themselves or others. Those meeting this
criteria are admitted to a mental health facility to be further evaluated by a
psychiatrist. Typically, mentally ill patients can be held for up to 72 hours,
after which a court order is required. Since the late 1970's, the
community-based care model has been encouraged within the U.S. rather than
institutionalization.
Inequities
EMTALA is an unfunded mandate; the federal government and the state governments
have never fully compensated both public and private hospitals for the full cost
of such emergency charity care. As a result, innumerable private hospitals have
gone out of business since 1986. Others have raised prices on those that can pay
to avoid going out of business. The hospitals do attempt to bill uninsured
patients directly under the fee-for-service model, but most such people cannot
pay their hospital fees, and escape into bankruptcy when hospitals seek legal
process against them.
Political issues
Prescription drug coverage
During the 1990s, the price of prescription drugs became a major issue in
American politics as the prices of many new drugs increased exponentially, and
many citizens discovered that neither the government nor their insurer would
cover the cost of such drugs. In absolute currency, the U.S. spends the most on
pharmaceuticals per capita in the world. However, national expenditures on
pharmaceuticals accounted for only 12.9% of total healthcare costs, compared to
an OECD average of 17.7% (2003 figures). Some 25% of out-of-pocket spending by
individuals is for prescription drugs.
The U.S. government has taken the position (through the Office of the United
States Trade Representative) that U.S. drug prices are rising because U.S.
consumers are effectively subsidizing costs which drug companies cannot recover
from consumers anywhere else (because many other countries use their
bulk-purchasing power to aggressively negotiate drug prices). The U.S. position
is that the governments of such countries should either deregulate their markets
or directly remit the difference (between what the companies would earn in an
open market versus what they are earning now) to drug companies or to the U.S.
government. In turn, those companies would be able to lower prices for U.S.
consumers. Currently, the U.S., as a purchaser of pharmaceuticals, negotiates
some drug prices but is forbidden by law from negotiating drug prices for the
Medicare program. Approximately one in five drugs that begin testing make it
through the full approval process.
Health care debate
Universal health care
The United States along with South Africa is one of the few industrialized
nations without universal coverage. There is currently an ongoing debate on the
need to achieve universal coverage as well as the best methods for improving the
U.S. health care system.
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